Same Store Sales, Bernanke Among Issues For Thursday's Market

1) October retail same store sales. Weather got colder toward the end of the month; traders are primed for bad news as most of the big stocks are at 52-week lows. Any good news should move them up.

2) Ben Bernanke will get grilled on the U.S. dollar and on subprime. The Fed chairman testifies before the Joint Economic Committee on the economic outlook.

3) Europe will be a market mover pre-open. European Central Bank will be out with comments, traders hoping the ECB will stay on hold at 4%; our CNBC Bureau in London notes that the key will be whether Trichet can walk the line between talking tough on inflation whilst at the same time not talking up the euro. He is really between a rock and hard place.

4) Bank of England also talks, traders also hoping them to stand pat at 5.75% due to worries over inflation but economists are predicting a 2008 cut due to slowing housing market and problems in credit markets.

By the way, a cut in bonuses isn’t the problem on the Street. An article in the New York Times today noted that bonuses could be down this year. That's an understatement: there is talk about big cuts in bonuses, depending on where you are, and in what part of the company.

The disaster is in the fixed income division of the banks and brokers, where the big losses have been seen. That is the group that will see the biggest drop in bonuses. Other groups, like investment banking, may not see drops. Unfortunately, fixed income is where some of the biggest job growth has been. And that's the REAL issue here: the Street is talking about MORE LAYOFFS.

This has big implications for bonuses: 1) people who are layed off are likely to get a much smaller bonus, and 2) it's a psychological game. Management wants to keep their best people; but if they believe jobs are going to be scarce they are far more likely to be a bit more parsimonious when it comes to bonuses.

And don't discount the effect of these amazing price drops in financials. Much of the wealth of many on Wall Street is tied up in the stock of their companies. With declines of 30% in some banks and brokers, you gotta believe some of the sellers have been employees, and if not what do you think this has done to their net worth?

One nugget may be a bit overblown: that even a modest reduction in bonuses, by, say 10% on the aggregate, could have a downside effect on the New York City economy. Well, maybe, but remember: 1) last year was a record year for bonuses, and 2) chances are it will be more than made up for by foreigners buying up the city. Have you noticed all those foreign accents in the bars and restaurants? New York City is on sale for Europeans!